Old McDonald's has some farms ...

Since entering China in 1990, McDonald's has expanded its networks to nearly 1,000 restaurants on the Chinese mainland and built up a sound local supply chain, which not only helps the hamburger king reduce outsourcing costs but also provides business and technological upgrading opportunities for local people, especially farmers.

So far, domestic companies produce more than 90 percent of the raw materials used by McDonald's in China. The world's largest fast food company has nearly 100 Chinese suppliers engaged in planting, husbandry, food processing and logistics

Recently, the US-based fast food chain appeared at the National Agricultural Exposition along with five of its major supply chain partners.

Beijing Simplot Food Processing Co Ltd, established in 1992 in Beijing's Fengtai District, is the provider of frozen French fries and other potato products for McDonald's. The company has been planting potatoes in China to help support local farmers and keep them out of poverty.

It uses advanced processing machinery imported from the United States and Holland to process China-grown strains of Russet, Burbank and shepody potatoes.

Take a Simplot potato plantation in the Inner Mongolia autonomous region. The annual production value of the farm jumped from 5 million yuan in 2002, when it began cooperation with the US-based fast food chain, to last year's 20 million yuan. Meanwhile production per mu (6.66 acres) jumped from 700 kg to nearly 3,500 kg, thanks to introduction of high technologies and new potato species.

Husi Food Company Ltd, located in northern China's Hebei province, has been supplying chicken, fish and vegetables to McDonald's since 1992. To date, it has 64 vegetable farms in 12 provinces and autonomous regions, which support thousands of rural people.

Besides meeting the demands of China's outlets, some of the materials produced by the Chinese suppliers are exported to McDonald's restaurants overseas, such as chains in Singapore, Malaysia, Japan, South Korea and the United States.

Bama is McDonald's sole pie supplier in China, bringing to local farmers enormous product sales opportunities, bringing China's outstanding farm products through McDonald's consumers around the world.

McDonald's says it has been paying great attention to new technology introduction to China and training for local suppliers, which also promote agriculture industrial upgrading of the Chinese related companies.

In addition, using local materials helps the fast food giant to carry out direct supervision and shortens delivery times to ensure freshness.

According to Jeffrey Schwartz, CEO of McDonald's China, the transnational company regards development with local communities as one of its top priorities when it does business around the world.

He says McDonald's is proud that it is contributing to helping Chinese farmers increase their incomes and upgrade their agricultural production methods.

(China Daily 10/27/2008 page8)